The CFO’s Role in Reducing Tech Debt in Higher Education
Whether you are anxious to grow enrollment, improve student experience, or increase your share of the online education market – if technology delivery is particularly slow – your institution probably has a tech debt problem.
Technical debt is a crippling burden that severely limits higher education institutions from making faster, more meaningful progress with their IT investments. If you’re a higher education CFO or executive, and hope to provide better, higher quality digital experiences for prospects, students, faculty and staff – then you must understand and account for tech debt.
Recently, we discussed this topic with a panel of experts in higher education, including:
- Guest speaker: Thomas Reams, EVP and CFO at Nightingale College
- Guest speaker: Aimee Leishure, Founder, Chief
- Panelist: Wayne Bovier: CEO and Co-Founder, Higher Digital
- Panelist: Henry DeVries, VP, Finance and Analytics, Higher Digital
Here’s a recap of this compelling discussion.
What is technical debt?
Technical debt is a term used in software development to describe the inevitable debt – money, resources, and time – that organizations incur due to the expedient delivery of services. Because the code base is rushed or customized, these legacy or custom solutions often require significant adjustment, rework, and maintenance. This creates mid- to long-term costs – aka “deferred maintenance” – that are rarely considered.
However, because tech debt is typically generated during the development and implementation phases the full force of its negative effect tends to be immediate – dragging down systems, business processes, and the user experience.
What are the symptoms of technical debt?
Tech debt in higher education institutions manifests itself in many ways. For example, technical support issues for purchased software may take more time to resolve, or new features aren’t provided on the version that your institution is running. Even more worrying, the version may no longer be supported, and the only recourse is to migrate to a new system.
Internally developed software can also fall prey to tech debt. For instance, your IT department may find that software bugs take more time to fix or new features require months of development, often breaking other features in the process.
How does tech debt impact higher education institutions?
Invariably, these issues slow down your business. If your institution’s systems aren’t flexing or evolving, the impacts are significant. Extended system or feature downtimes can result in enrollment and retention shortfalls and even learning blackouts. If a system cannot handle new requirements because it is over-customized, gaps must be addressed with costly manual development, causing your institution to fall behind the competition.
It may surprise you, but these issues are not a function of software; the root cause is the organization itself.
Too often in higher education, IT is viewed as a service, where every department fights to have its custom feature requests prioritized and completed. Couple this with the naïve view that it’s easier and cheaper to adapt software to the institution’s processes – recruitment, enrollment, financial aid, or alumni – not vice versa, and it’s easy to see how tech debt is has propagated in colleges and universities.
Such was the case at Nightingale College, a fast-growing distance learning nursing institution based in Salt Lake City, Utah. The college was founded to address the nation’s nursing shortage by educating students no matter where they live. This unique model leans heavily on IT systems and data. But following years of isolated decision-making about IT investments, short-term technology planning horizons, and a focus on software customization as a solution to business processes – tech debt had crept into the organization.
The impacts were profound. Department-specific solutions led to software overlap and data isolation. An excess of software customizations created maintenance headaches and limited the IT department’s ability to apply upgrades – essentially tethering the institution to the past. Technology solutions also quickly became obsolete.
Like many institutions, Nightingale College procured more technology or threw labor at the problem. But plugging holes with people rather than aligning those resources with more growth-oriented initiatives only added more stress and tech debt to the ecosystem.
“We were stuck in the mire of tech debt,” said Thomas Reams.
Leishure also pointed out that tech debt ultimately slows down what institutions are providing for their students and faculty.
How CFOs can mitigate tech debt
The first step to preventing tech data is not to appoint blame. Your institution needs to understand how it got to this place in a non-emotional, data-centric way. This starts with determining how technology investments and deployments are prioritized.
All higher education institutions have a strategic plan. But IT initiatives rarely align with it. Because institutions are comprised of siloed departments, priorities are typically determined by whoever yells the loudest or has the biggest budget.
To move beyond this decentralized approach and eliminate tech debt, your institution must take a holistic approach to change – where the CEO and CFO sit in the same chair and map a strategy for the entire institution. One that drives the prioritization of technology initiatives, focuses on continuous process improvements, and supports the greater cause – not just hyper-individual needs.
“IT is one of your most strategic partners, whether you are an operations person, whether you are a finance person, everybody needs to be in the room,” said Leishure.
This approach was at the heart of Nightingale College’s tech-debt avoiding practices.
“We had to do better, so we developed an IT strategy roadmap,” said Reams. To better prioritize IT initiatives, the forward-looking plan aligned IT with the college’s broader strategic plan. Key to achieving this synergy, was to educate leadership on tech debt and shift mindsets away from a decentralized approach to how technology is prioritized and invested.
“It was hard, but we got people on board, from the C-suite down to junior managers,” said Reams.
With this business process alignment foundation in place, Nightingale College moved to minimize software customizations. Going slow to speed up, the institution now takes a little more time to identify the synergy and fit of a new feature, accepting delays on the front end to avoid drag down the line.
Formalizing tech debt as a standardized, tracked KPI
To effectively enlist support and incite action from the cabinet and board to mitigate tech debt, your institution must expand how that debt is accounted for and quantify it as a negative KPI.
Each time a project is proposed, consider the immediate net cost of acquisition and implementation. Because tech debt accumulates over time, it’s also wise to conduct periodic reviews of major systems to estimate the net cost of changes and maintenance.
With a measurable KPI, your institution can then begin to drive more thoughtful investments, assess how behaviors are changing, and correlate progress on its journey to eliminating tech debt.
“That’s the approach we’ve taken, and it’s been incredible,” said Reams. “Our costs are predictable…we can dial in headcount instead of throwing labor at the problem. We don’t have a lot of customizations to keep up with when dealing with upgrades.”
The results have paid dividends for the entire institution – “Our technology has become a competitive advantage for us. And, when you have software that makes sense and process flows well, people report a good experience.”
To learn more about reducing tech debt in your college or university, listen to these insights on demand.